Post Utme Delsu 2017 Commerce Question 16

Practice objective / multiple choice question 16 from the 2017 Post Utme Delsu Commerce examination.

Post Utme Delsu 2017 Commerce Objective / Multiple Choice
Question 16 POST_UTME_DELSU • 2017 • COMMERCE • objective

The Central Bank of Nigeria (CBN) uses monetary policy to control inflation by increasing the reserve requirement for commercial banks. This action will lead to a decrease in the money supply, which will cause a decrease in the aggregate demand. However, if the CBN also increases the interest rate, it will lead to a decrease in consumption and investment, but an increase in the exchange rate. What is the likely effect on the trade balance?

Answer Options

A. An increase in the trade deficit
Correct Answer B. A decrease in the trade deficit
C. No change in the trade balance
D. An increase in the trade surplus
Correct Answer
B
Correct Option:
A decrease in the trade deficit

About This Question

This is Post Utme Delsu 2017 Commerce Question 16. It is one of the objective questions from the 2017 Post Utme Delsu Commerce examination.

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